Exhibit
10.31


 


THIS
NOTE AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “ACT”), OR ANY STATE SECURITIES LAWS. THIS NOTE AND THE SECURITIES ISSUABLE UPON CONVERSION HEREOF MAY NOT BE
SOLD, OFFERED FOR SALE, TRANSFERRED, ENCUMBERED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THIS NOTE AND THE SECURITIES ISSUABLE UPON CONVERSION HEREOF UNDER THE ACT AND APPLICABLE STATE SECURITIES
LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO DESERT HAWK GOLD CORP. THAT SUCH REGISTRATION IS NOT REQUIRED OR SUCH
TRANSACTION COMPLIES WITH RULES PROMULGATED BY THE SECURITIES AND EXCHANGE COMMISSION UNDER THE ACT.


 


DESERT
HAWK GOLD CORP.


10%
SECURED CONVERTIBLE PROMISSORY NOTE


 


	Issue Date: October 14, 2016 	$125,000




 


FOR
VALUE RECEIVED, DESERT HAWK GOLD CORP, a Nevada corporation (the “Borrower”), hereby promises to pay to West
C Street, LLC (the “Holder”), or the Holder’s assigns or successors in interest, the principal amount
of One Hundred Twenty Five Thousand Dollars ($125,000) (the “Principal Amount”), together with interest thereon.
This note is issued as of the “Issue Date” set forth above as part of a series of substantially similar promissory
notes (each a “Note” and, collectively, the “Notes”) issued or to be issued pursuant to
the same form of the Secured Note Purchase Agreement to which this form of Note is attached as Exhibit A (the “Purchase
Agreement”) to the persons executing such Agreement or their assigns (collectively, the “Holders”).


 


1.  INTEREST
AND PAYMENT


 


1.1  Interest Rate.Interest payable on this Note shall accrue at a rate of ten percent (10%) per annum (the “Interest
Rate”), calculated on the basis of a 365-day year.


 


1.2  Maturitv
Date. The outstanding principal of this Note (the “Outstanding Principal”) together with any accrued and
unpaid interest thereon (the “Outstanding Interest”), shall all be due and payable on September 30, 2018 (the
“Maturity Date”).


 


1.3  Interest
Payment. All interest payments shall be deferred until September 30, 2017 and, from thenceforth, interest payments shall be
made quarterly until the Maturity Date.


 


1.4  Optional
Prepayment in Cash. The Borrower may prepay this Note at any time without penalty. The Borrower shall provide the Holder with
ten (10) days’ prior written notice of its intention to prepay this Note, and the Holder shall have such ten (10) day period
in which to exercise its right to convert this Note pursuant to Section 3 hereof. In the event the Holder does not convert this
Note within such ten (10) day period, then the Borrower shall have the option of prepaying any Outstanding Principal and Outstanding
Interest, without premium or penalty.


 






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1.5  Maximum
Payments. Nothing contained herein shall be deemed to establish or require the payment of a rate of interest or other charges
in excess of the maximum permitted by applicable law. In the event that the rate of interest required to be paid or other charges
hereunder exceed the maximum permitted by such law, any payments in excess of such maximum shall be credited against amounts owed
by the Borrower to the Holder and thus refunded to the Borrower.


 


1.6  Payment
on Non-Business Days. Whenever any payment to be made shall be due on a Saturday, Sunday or a public holiday under the laws
of the State of Nevada, such payment may be due on the next succeeding business day and such next succeeding day shall be included
in the calculation of the amount of Outstanding Interest payable on such date.


 


1.7  Replacement.
Upon receipt of a duly executed, notarized and unsecured written statement from the Holder with respect to the loss, theft or
destruction of this Note (or any replacement hereof) and a standard indemnity, or, in the case of a mutilation of this Note, upon
surrender and cancellation of such Note, the Borrower shall issue a new Note, of like tenor and amount, in lieu of such lost,
stolen, destroyed or mutilated Note.


 


2.  CONVERSION


 


2.1  Voluntary
Conversion. Subject to and in compliance with, the provisions contained herein, the Holder is entitled, at its option, at
any time prior to the Maturity Date, to convert the Outstanding Principal of this Note plus all unpaid and accrued Outstanding
Interest payable under this Note from the Issuance Date, into fully paid and nonassessable shares of Common Stock of the Borrower
(the “Shares”). Such conversion shall be effected at the rate equal to the lesser of (i) $0.25 per Share; or
(ii) the price of any convertible debt or equity funding (including the purchase of DMRJ Group’s (as defined below) interest
by any third party). No fractions of Shares will be issued on conversion.


 


2.2  Mechanics
and Effect of Conversion. In order to exercise the voluntary conversion provided by Section 2.1 above, the Holder shall submit
a complete and executed copy of the Notice of Conversion to the Borrower. The Note the Holder shall also deliver to the Borrower
the original executed Note as a condition to receiving a certificate or certificates evidencing the securities issued to the Holder
pursuant to the voluntary conversion provided by Section 2.1 above.


 


3.  SECURITY
AGREEMENT. This Note is secured in accordance with the terms of the Security Agreement attached to the Purchase Agreement
as Exhibit B (the “Security Agreement”) and, in accordance therewith, senior to the Borrower’s
senior secured indebtedness (the “Senior Secured Debt”), including, without limitation, any currently outstanding
indebtedness to DMRJ Group I, LLC, a Delaware limited liability company (“DMRJ Group”). The Holder hereby expressly
and unconditionally agrees that upon conversion of this Note pursuant to Sections 2.1 and 2.2 herein, the Holder’s security
interest under the Security Agreement shall terminate in its entirety and the Holder shall then file, without any action on the
part of Borrower required, a UCC-3 termination statement in such jurisdiction(s) as the Borrower shall deem necessary or appropriate.


 






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1.  EVENTS
OF DEFAULT


 


2.3  The
occurrence of any of the following events is an “Event of Default”:


 


(a)  Failure
to Pay Principal, Interest or other Fees. The Borrower fails to pay the Outstanding Principal and any Outstanding Interest
on the Maturity Date and such failure shall continue for a period of thirty (30) days following the date upon which any such payment
was due.


 


(b)  Breach
of Covenant. The Borrower breaches any covenant or other term or condition of this Note, and such breach continues for a period
of thirty (30) days after the occurrence thereof.


 


(c)  Receiver
or Trustee. The Borrower shall make an assignment for the benefit of creditors, or apply for or consent to the appointment
of a receiver or trustee for it or for a substantial part of its property or business; or such a receiver or trustee shall otherwise
be appointed.


 


(d)  Bankruptcy.
Bankruptcy, insolvency, reorganization or liquidation
proceedings or other proceedings or relief under any bankruptcy law or any law for the relief of debtors shall be instituted by
or against the Borrower.


 


2.4  Upon
the occurrence and continuance of an Event of Default beyond any applicable grace period, the Holder may make all sums of Outstanding
Principal, Outstanding Interest and other fees then remaining unpaid hereon and all other amounts payable hereunder immediately
due and payable. If, with respect to any Event of Default, the Borrower cures the Event of Default, the Event of Default will
be deemed to no longer exist and any rights and remedies of the Holder pertaining to such Event of Default will be of no further
force or effect. Payments shall be applied first to Outstanding Interest and then to any Outstanding Principal balance of this
Note.


 


3.  MAXIMUM
RATE OF INTEREST. Notwithstanding any provision of this Note or the Secured Note Purchase Agreement to the contrary, the Borrower
shall not be obligated to pay Outstanding Interest pursuant to this Note in excess of the maximum rate of interest permitted by
the laws of any state determined to govern this Note or the laws of the United States applicable to loans in such state. If any
provisions of this Note shall ever be construed to require the payment of any amount of Outstanding Interest in excess of that
permitted by applicable law, then the Outstanding Interest to be paid pursuant to this Note shall be held subject to reduction
to the amount allowed under applicable law and any sums paid in excess of the interest rate allowed by law shall be applied in
reduction of the principal balance outstanding pursuant to this Note. The Holder acknowledges that the laws of the State of Nevada
will govern the maximum rate of interest that it is permissible for Holder to charge the Borrower pursuant to this Note.


 






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4.  MISCELLANEOUS


 


7.1
Failure or Indulgence Not Waiver. No failure or delay on the part of the Holder hereof in the exercise of any power, right
or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or
privilege preclude other or further exercise thereof or of any other right, power or privilege. All rights and remedies existing
hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available.


 


1.1
Notices. Any notice herein required or permitted to be given shall be in writing and shall be deemed effectively given:
(a) upon personal delivery to the party notified, (b) when sent by confirmed facsimile if sent during normal business hours of
the recipient, if not, then on the next business day, (c) five (5) days after having been sent by registered or certified mail,
return receipt requested, postage prepaid, or (d) one (1) day after deposit with a nationally recognized overnight courier, specifying
next day delivery, with written verification of receipt. All communications shall be sent to the Borrower at the address provided
in the Purchase Agreement, and to the Holder at the address(es) provided in the Purchase Agreement for the Holder, or at such
other address as the Borrower or the Holder may designate by ten (10) days advance written notice to the other parties hereto.


 


4.1  Assignability.
This Note shall be binding upon the Borrower and its successors and assigns and shall inure to the benefit of the Holder and the
Holder’s successors and assigns. This Note shall not be assigned by the Holder without the prior written consent of the
Borrower. Borrower may assign this Note to a successor in a merger or sale of assets by Borrower without Holder’s consent.


 


4.2  Amendment.
This Note may only be amended, modified or terminated by a writing executed by the Borrower and the Holder, provided however,
that the parties may not amend, modify or terminate any provision of this Note or the Notes that would detrimentally prejudice
the rights of any of the other Holders.


 


4.3  Governing
Law. This Note shall be governed by and construed in accordance with the laws of the State of Nevada, without regard to principles
of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by this Note
shall be brought only in the state courts or federal courts located in the county and state of Nevada. All parties and the individual
signing this Note on behalf of the Borrower agree to submit to the jurisdiction of such courts. In the event that any provision
of this Note is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative
to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such
provision that may prove invalid or unenforceable under any law shall not affect the validity or unenforceability of any other
provision of this Note. Nothing contained herein shall be deemed or operate to preclude the Holder from bringing suit or taking
other legal action against the Borrower in any other jurisdiction to collect on the Borrower’s obligations to the Holder,
to realize on any collateral or any other security for such obligations, or to enforce a judgment or other court in favor of the
Holder.


 


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IN
WITNESS WHEREOF, the Borrower has caused this Secured ConvertiblePromissoryNote to be signed in its name effective
as of the date first written above.


 





	 	DESERT HAWK GOLD CORP
	 	 	 
	 	By:	/s/
    Howard Crosby
	 	 	Howard Crosby,
	 	 	Chief Executive Officer



 






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NOTICE OF CONVERSION


 


Desert Hawk Gold Corp.


 


Re: Conversion of Note


 


Gentlemen:


 


The undersigned owner of this Note hereby
irrevocably exercises the option to convert this Note into shares of common stock of Desert Hawk Gold Corp., in accordance
with the terms of this Note, and directs that the shares issuable and deliverable upon the conversion, together with any
check in payment for fractional shares, be issued in the name of and delivered to the undersigned unless a different name has
been indicated below. If shares are to be issued in the name of a person other than the undersigned, the undersigned will pay
any transfer taxes payable with respect thereto.


 


Date:__________ , 201 ________


 


	 	 	
	 	 	(Signature)



 


COMPLETE FOR REGISTRATION OF SHARES


 





		 	
	(Printed Name)	 	(Social Security or other identifying number)
	 	 	 
		 	 
	(Street Address)	 	 
	 	 	 
		 	 
	(City, State, and ZIP Code)	 	 



 


 


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